WHAT’S UP? - A Standing O at Notre Dame; India/Democracy’s big win; Jim Cramer on who brought our nation to its knees. Soaring stock market – after9 weeks in a row takes a breather; Of course more on Shadow banks; Reading the Tea Leaves.

President Barack Obama is hooded as he receives an...

Photo – Charles Rex Arbogast/AP

Obama’s Sanding Ovation at Notre Dame

The contrast between Obama and the previous administration is like night and day.  Where Cheney Bush projected fear and confrontation, Obama, who inherited two wars and and the greatest economic meltdown since the great depression, worked on ways finding common ground. You can listen to his compelling 30 minute address at this link

Those who tuned in to see Barack the pro choice “baby killer” were soarley  disappointed.

PM Manmohan Singh

photo BBC

Big Victory in the World’s Largest Democracy

The Congress Party in India surprised the pundents and came close to winning a majority in parliament. The party that saw the biggest drop was (Hindu Nationalist Party) who, as the name implies, fosters nationalism and fear of those who are different.  Also shrinking in size were the many independent parties including the Communist. (Congress will be less dependent on the Communists who were their allies in last government)

Its hard to say how big or small a role Obama’s election in the USA played in the victory of the more moderate Congress party. But the bottom line – a more moderate, less confrontational, and pro business victory in India benefits the world. Congress did reach out and gained more votes from the lower classes in India. Stocks in India have surge 17% – BBC

Jim Cramer

photo – Time mag.

Cramer’s Interview 

Money quote from CNBC’s most popular stock analyst Jim Cramer, in Time magazine  on the financial innovations of last several decades -

They almost brought our country down. The only guy who really called this right was Carl Marx. Marx understood what would happen if you let the markets run amok. Of course, it was done by right-wing Republicans. They brought our nation to its knees, and we’re not going to end up being a great power because of what happened.

Cramer did take it on the chin in a Jon Stewart interview. Stewart’s  attack was directed rightly at the financial channels concept of cheerleading unregulated markets. Cramer obviously took the attack personally.(See past Investors411 for more)

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Index Percentage % Volume
Dow -0.75% down
NASDQ -0.54% down
S&P500 -1.14% down
Russell2000 -1.01% -

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Technicals & Fundamentals

Let’s stick with the same prediction, for this week as last. More consolidation with a downside bias. After 9 up weeks in a row a consolidation is good for bulls. Going to far too fast creates bubbles. 

From Friday -Volume has dried up to a trickle. Looks like an ocean with no breeze. No breeze means no direction. Declining volume as the market retreats is also  bullish sign. If you’re long equities what you want right now is consolidation or a pull back in light volume.

@ 877 on the benchmark S&P 500 is still an important support level. We closed just above it at 883. When support levels break is often means many  investors start looking at the next support level (@ 832 – see chart at side of blog – both old high and the 50 day moving ave.) as the next area to buy or halt the fall.

XLF - The ETF that tracks financials (mostly shadow banks ) ended the week much lower. Friday they closed down -2.04% in below average declining volume. Volume is NOT confirming the price move.

Market’s Major Mantra - Again - If Shadow Banks go up – so will stocks. If Shadow banks go down so will stocks 

WTIC - Oil prices fell from the $60+ high last week and have established a range between $54 and $60. Down Friday -4.07% to $57.00. Oil prices are often an indicator of which way stocks are moving. This is a bearish number for stocks.

BDIThe Baltic Dry Index that measures world trade  broke through resistance last week and is at a new 6 month high. While 2544 is a long way from the 11,793 high a year ago its a move in the right direction.  World trade is critical, because if protectionism/nationalism between countries grows over trade the recovery is doomed.

Reading this weeks tea leaves - Lets hope and predict a consolidation with a downside bias this week in weak volume. BDI and India are both long term  positives. If 877 support holds on (Mon, Tues. & Wed.) the S&P 500, we could see  the nine week stampede of bulls continue later this week. 877 is the number to watch.

Long Term Outlook = NEUTRAL

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING !

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